The chief of Federation of Hong Kong Industries has this to say about growing in Hong Kong today:
With weak export demand and rising production costs, what strategies should Hong Kong companies adopt?Land costs, wage costs and labour costs will continue to rise. In light of this, Hong Kong companies should give up on the “cheap land” and “low wage” operational mode they have employed in the past. Manufacturers need to transform themselves. They should upgrade and look to increase the value-added aspect of their products. This should include a review of product development, product design, quality improvement, brand building and marketing practices. If this can be achieved, their customers will see their products as genuinely representing value-for-money, and they will then be more willing to accept higher price points.
So, compete on design... and then this..
If you have established a private label or own a brand license, for instance, then a client may believe that adopting that brand on a product may raise the profit margin. In that case, he would accept your price increase. The bargaining power of those manufacturers engaged in OEM is not high, however, and any transformation and upgrade programme will require the support of their clients. OEM and branding initiatives, however, can provide an important lifeline. OEM can be used to maintain a steady supply of orders and continue daily operation, while self-developed products can be gradually introduced into new markets. This allows for time to test the water and to build a brand incrementally.
OEM.. This has always been a Hong Kong strong suit, so the knowledge is there... I don't see Hong Kong having a trouble making the shift to this.
Feel free to forward this by email to three of your friends.
With weak export demand and rising production costs, what strategies should Hong Kong companies adopt?Land costs, wage costs and labour costs will continue to rise. In light of this, Hong Kong companies should give up on the “cheap land” and “low wage” operational mode they have employed in the past. Manufacturers need to transform themselves. They should upgrade and look to increase the value-added aspect of their products. This should include a review of product development, product design, quality improvement, brand building and marketing practices. If this can be achieved, their customers will see their products as genuinely representing value-for-money, and they will then be more willing to accept higher price points.
So, compete on design... and then this..
If you have established a private label or own a brand license, for instance, then a client may believe that adopting that brand on a product may raise the profit margin. In that case, he would accept your price increase. The bargaining power of those manufacturers engaged in OEM is not high, however, and any transformation and upgrade programme will require the support of their clients. OEM and branding initiatives, however, can provide an important lifeline. OEM can be used to maintain a steady supply of orders and continue daily operation, while self-developed products can be gradually introduced into new markets. This allows for time to test the water and to build a brand incrementally.
OEM.. This has always been a Hong Kong strong suit, so the knowledge is there... I don't see Hong Kong having a trouble making the shift to this.
Feel free to forward this by email to three of your friends.
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